Stock-Based Compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

5. Stock-Based Compensation

Stock Plans

During the nine months ended September 30, 2015, the Company granted options to purchase 65,000 shares of common stock and 1.4 million shares of restricted stock, with a total value of $2.1 million. This cost will be amortized ratably over a period of 12 to 48 months.

As of September 30, 2015, there were 8.5 million shares available for future grants under the new 2015 Omnibus Equity Incentive Plan which was approved by the shareholders on June 18, 2015.

The new plan replaced the 2005 Stock Option / Stock Issuance Plan, which was terminated on the same date. All outstanding options under the 2005 Plan will remain outstanding, but no further grants will be made under that Plan.

Employee Stock Purchase Plan

The Company’s most recent six-month offering period ended September 30, 2015 and resulted in 12,451 shares being purchased/granted at a fair value of $0.74 per share. The next six-month offering period began on October 1, 2015 and will end on March 31, 2016. These shares will have a fair value of $0.69 per share.

Stock Compensation

The Company accounts for all stock-based payment awards made to employees and directors based on their fair values which is recognized as compensation expense over the vesting period using the straight-line method over the requisite service period for each award as required by FASB ASC Topic No. 718, Compensation-Stock Compensation. Restricted stock is valued using the closing stock price on the date of the grant. Options are valued using a Black-Scholes valuation model.

Stock-based non-cash compensation expenses related to stock options, restricted stock grants and the employee stock purchase plan were recorded in the financial statements as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(unaudited)				(unaudited)
Cost of revenues	$	3	$	2	$	9	$	10
Selling and marketing		84		63		242		201
Research and development		153		160		473		491
General and administrative		287		307		903		1,120
Restructuring expense		—		—		—		1,273
Total non-cash stock compensation expense	$	527	$	532	$	1,627	$	3,095

Total share-based compensation for each quarter included cash payments of income taxes related to grants of restricted stock in the amount of $16,000 and $27,000 for the three month periods ended September 30, 2015 and 2014, respectively. The cash payments of income taxes related to grants of restricted stock totaled $70,000 and $145,000 for the nine month periods ended September 30, 2015 and 2014, respectively.